Suppose total disposable income in Country X rises by $500 billion while total saving rises by $80 billion. What would be the slope of the consumption function for this nation? O 0.10 O 0.16 O 0.50 O0.84 0.90
Q: In Figure 7.2, if the consumption function is C=100+0.75Y, then: O the savings function is…
A: Relationship between Income (Y), consumption (C) and saving (S) Y = C + S Where Y is income C is…
Q: Consider an economy described by the 6 following equations. In this economy, compute private savi…
A: Here, information about the components of aggregate demand is given, using which one can compute the…
Q: G IM AE 200 200 200 s00 400 100 500 600 -100 200 500 400 150 Refer to the data above to answer this…
A: here we calculate the value of the Multiplier and choose the correct option so the calculation of…
Q: Given the consumption function C = $758 + 0.65 x Y, an increase in disposable income from %3D $7,640…
A: Given: C=758+0.65Y Old income level=$7640 New income level=$9080 To find: Increase in savings
Q: Quèstion 27 $60 $40 $20 $50 + 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average…
A: The graph shows savings curve that shows the relationship between disposable income and savings.
Q: The slope of the IS curve is flatter when... O a. the transfer payment multiplier is large O b. the…
A: The IS curve explains the nature of the goods market and it describes the relationship between the…
Q: 12. What is the saving function associated with the following consumption function: C = 30 + 0.7DI ?…
A: Devaluation is basically decreasing the value of your own currency.
Q: Y= C+I+G C= 500 + 0.8(Y-T) I = 300 G= 700 T= 0.25Y Refer to Table 27-1. What is the level of…
A:
Q: If investment increases by $100 and, as a result, gross domestic product (GDP) ultimately increases…
A: Change in investment=$100 Change in GDP=$200
Q: Suppose disposable income increases from $7 trillion to $8 trillion. At the same time, consumption…
A: Disposable income: It is that portion of an individual’s overall income over which the recipient of…
Q: 69. Consider the following consumption function C = 1100 + 0.6Yd What is the simple multiplier? O a.…
A: The formula for the multiplier is as follows : Multiplier = 1 / 1 - MPC
Q: I: Investment; G: Government spending; EX: Exports; T: Taxes; and IM: Imports. Suppose that I+G+EX…
A: At equilibrium, Y = C + I + G + EX - IM I + G + EX = 25 IM= 15 Y= C + 25 - 15 Y= C + 10
Q: Aggregate planned expenditure decreases if O a. investment increases. O b. real GDP decreases. O c.…
A: Aggregate planned expenditure is computed as:
Q: 66. Consider the following consumption function C = 1100 + 0.6Yd What is autonomous consumption? O…
A: Autonomous consumption is being defined as the expenditures which the consumers must make even while…
Q: 60. If Eman received a $1,000 increase in disposable income and her marginal propensity to save is…
A: Disposable Income = $1000 MPS (or Marginal Propensity to Save) = 0.15 Since, MPC + MPS = 1,…
Q: In the income-expenditure model, if autonomous investment decreases by $10 billion, a. planned…
A: The income expenditure model shows the relationship between income and expenditure in an economy. It…
Q: 8. Assume that the consumption function is C= 564 +0.66(Y - T), Y is 6679, and T = 264 +0.58Y.C then…
A: Answer: C=564+0.66Y-TC=564+0.666679-264-0.58×6679C=564+0.66×2541.18C=2241.18 Option B is correct.
Q: The table given below states the value of the Real GDP and the different components of aggregate…
A: Real GDP is the value of final goods and services produced in the economy within a given period of…
Q: QUESTION 1 Below is the data for an economy in the year 2016. Gross Domestic Product = $25,000…
A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports.
Q: Question 20 $60 O $40 + * $20 + $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The…
A: The average propensity to consume (APC) is a measure of how much money is spent instead of saved.…
Q: A household that is a net saver owes less money to its creditors than it has saved or has lent out…
A: The amount that is charged by the lender on any principal amount that is being borrowed by a…
Q: (all data in real $ bn). On the graph below YO= 1782, Y1= 1868 and Y2 = 2018. If the initial…
A: Given: Y0=1782 Y1=1868 Y2=2018 Change in A=60
Q: If the MPC is 4/5, and policy makers decide to increase taxes by $250 billion in order to slow an…
A: Given: The MPC is = 4/5 The taxes hiked by = $250 billion To Find: The change in GDP:
Q: If disposable income increases by $1 and consumption goes up by $0.80, we can conclude that... O a.…
A: Lord K.M.Keyes explains the relationship between consumption (C) and income (Y), it is known as the…
Q: If a $5,000 increase in income leads to additional savings of $1,250, the marginal propensity to…
A: Marginal propensity to save refers to the ratio of change in saving to change in income :-
Q: If Wanda's income is reduced to zero after she loses her job, her consumption will be and her saving…
A: Every individual needs to consume in order to survive. Hence even if an individual's income is zero,…
Q: Derive the saving function and the consumption function. O A. S= - 800-0.25Y and C= 800 +0.75Y %3D O…
A: Saving function: S = a + bY When Y = 0, S = - 800 (vertical intercept = a), and MPS (b) = 0.25 S = -…
Q: An economy saves 20 percent of any increase in income and there are no income taxes or imports.…
A: It is given that; Marginal propensity to save (MPS) = 0.2 the increase in investment= $2 billion
Q: If the multiplier is 4, what is the MPC? O 0.25 O 0.5 O 0.75 1
A: Given: Multiplier (k) = 4
Q: Consider a closed economy for which GDP is equal to 22,000, taxes are equal to 7,000, consumpta…
A: In a closed economy there is no trade with other countries thus net export equals zero.
Q: If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new…
A: Marginal propensity to consume quantifies the induced consumption for every additional dollar of…
Q: If the Marginal Propensity to Consume is 80%, then the Consumption Multiplier is O 8 O 2 O 1.25 O 5…
A: Multiplier show the how much income will multiplied in the economy , so its depend upon the level of…
Q: Assume that a farmer has $223,500 in Total Assets and $90,500 in Owner Equity, faces a 15% income…
A: The Return on assets ratio is a type of profitability ratio that indicates that how much a company…
Q: According to the text, a "multiplier" is used as an assessment and evaluation tool for several…
A: The proportion by which a particular variable increases/decreases as a response to fluctuations in…
Q: If the consumption function is of the form [C= 80 + 0.4 Y, the MPS equal: Lütfen birini seçin: O A.…
A: Consumption function given above is of the form C= c+bY ie 80+0.4Y Where c is autonomous consumption…
Q: Refer to problem 3. The spending multiplier is O 5 O 4 O 0.8 O 2
A: Spending multiplier = 1 / [1 - MPC] MPC = Chnage in consumption / Chnage in income
Q: 2. If disposable income is 4130, consumption is 2400, government spending is 431, and total taxes…
A: here we calculate the national savings by using the given information and choose the correct option…
Q: 32 14. If consumption function is given by : C= 100 + 0.8Yd , then MPS equal a. 0.8 O b. 8 O c. 2 O…
A: In Keynesian economic theory, the marginal propensity to save (MPS) refers to the proportion of an…
Q: Which one of the following is TRUE? Select one: O a. Our productive capacity declines when net…
A: Net Investment = Gross Investment ( money spent on capital assets) - Depreciation of those assets.
Q: In a model with no government or foreign sector, if autonomous consumption is c30, investment is…
A: MPC is the Marginal propensity to consume which shows the ratio of change in change in consumption…
Q: If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, inventories will be…
A: [1] If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, then…
Q: Statement A: As disposable income goes up, the APC falls but APS increases. Statement B: As…
A: Average propensity to consume(APC) indicates the part of income that is kept for consumption…
Q: 14. If consumption function is given by : C= 100 + 0.8Yd , then MPS equal О a. 0.8 O b. 8 O .2 O d.…
A: Consumption is the spending or expense which is incurred for the purpose of utility by the consumer…
Q: Given the consumption function C = $758 + 0.75 x Y, an increase in disposable income from $7,640 to…
A: Marginal propensity to consume (MPC): - it is a fraction of the change in disposable income that is…
Q: What is the downside of using prizes to promote the creation of new technology? O It slows the…
A:
Q: When there's an increase in the cost of electricity for operating firms' machines: O a. The…
A: Here, the electricity cost is a operating cost since it is use in the operations and production.…
Q: If the multiplier is 5, what is the MPC? O 0.20 O 0.50
A: The MPC (Marginal Propensity to Consume) is a crucial component of Keynesian macroeconomic theory.…
Q: Problems 1. Assuming the level of investment is $16 billion and independent of the level of total…
A: In an economy, the level of savings depend upon the real income of the people as it is the…
Q: In an economy, autonomous consumption is $10. If Income is $90 and the mpc is 0.9, how much is…
A: Marginal propensity to consume refers to change in consumption with respect to change in income.…
Q: 13. If consumption function is given by : C= 100 + 0.8Yd , then MPC еqual O a. 02 O b. 8 O c. 2 O d.…
A: Macroeconomics is the study of the economy as a whole. It explains different aspects such as income,…
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- 12. Given this diagram of Consumption and Savings functions, What will be the level of savings at an income level of 60? 6. Given this diagram of Consumption and Savings functions, What will be the level of savings at an income level of 20? 07. Given this diagram of Consumption and Savings functions, What is the level of total desired consumption at income level of 80? 8. Given this diagram of Consumption and Savings functions, What is the level of "induced consumption" at income level of 40Say you define your permanent income as the average income this and the past 4 years’ incomes and you always consume 4/5 of your permanent income. Your earnings record over these years has been: Yt = 40,000 Yt-1 = 38,000 Yt-2 = 34,000 Yt-3 = 32,000 Yt-4 = 31,000 If next year your income increases to Yt+1 = 46,000 by how much will your consumption change between year t and year t+1?ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is C = 60 + 0.75Y. Also suppose that income (Y) is $600. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places if necessary. For parts c and e, enter your answers as a whole number. a. MPC = b. MPS = c. Level of consumption = $ d. APC = e. Level of saving = $ f. APS =
- Bora's income in the current period is y=200, and income in the future period is y'=250. He pays lump-sum taxes t=30 in the current period and t'=10 in the future period. The real interest rate is 5%, per period.Suppose that Bora will always choose current consumption, c and the future consumption, c′ in a constant proportion:c=32c′ a) Determine the optimal current-period and future-period consumption for Bora. b) Determine the optimal saving for Bora, and show this in a diagram with his budget constraint and indifference curves, and also determine if Bora is a lender or a borrower?For an economy the following functions have been given:C = 100 + 0.8YS = -100 + 0.2YI = 120 – 5rMs = 120Md = 0.2Y – 5rCalculate the following:5.1.1. IS equation 5.1.2. LM equation 5.1.3. Equilibrium level of income 5.1.4. Equilibrium level of interest rate. 5.1.5 Calculate National saving. 5.1.6 Calculate money demand 5.1.7 Find consumption9. Suppose Amal calculates her permanent income by adaptive expectations . Year 2020 Amal's permanent income was 38,000 , and year 2021 actual income is 41,000 . Assume that , long - run marginal to consume is 0.90 and short - run marginal propensity to consume is 0.28 . What is her consumption expenditure year 2021 ? O 36.774 O 35,040 O 40.226 O 33.454 O 34.740 O None of the above is correct
- Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of between 20 and 25 percent; another $10 billion yielding between 15 and 20 percent; another $10 billion between 10 and 15 percent; and so forth. Cumulate these data and present them graphically, putting the expected rate of return on the vertical axis and the amount of investment on the horizontal axis. What will be the equilibrium level of aggregate investment if the real interest rate is (a) 15 percent, (b) 10 percent, and (c) 5 percent? Explain why this curve is the investment demand curve.1. Suppose that a rise in income from P60,000 to P70,000 leads to an increase in consumption from P47,000 to P54,000.Suppose that the real interest rate is 6%. Next, assume that some factors changes, such that the expected rate of return, declines by  two percentage points at each prospective level of investment. Assuming no change in the real interest rate, by how much and in what direction will the investment change?  which of the following might cause this change: (a) a decision to increase inventories; (b) an increase in excess production capacity.
- 5 3. permanent Income Hypothesis a) suppose that beta=.9 and R= 2222 (that is ~22%). For an individual who acts according to the PIH, will their consumption next period be higher than current consumption or lower? b) What is the main crucial difference between the Keynesian Consumption function and the consumption function derived from the PIH (or Lifetime Income Hypothesis)? c) If Present Value of future income stream is 500,000 and a person has a beta of.8, how much will their consumption go up today if only today's income increases by 1000? How much will their consumption increase (approximately) if their income goes up by 1000 in all periods?The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveable 27-1 Y = C + I + G C = 500 + 0.8(Y − T) I = 300 G = 700 T = 0.25Y Table 27-1 Y = C + I + G C = 500 + 0.8(Y−T) I = 300 G = 700 T = 0.25Y Refer to Table 27-1. What is the level of consumption in this model? a. 2,550 b. 2,950 c. 2,350 d. 2,750 e. 2,150